Scottsdale: Telesphere Networks Raises $15 Million

Wednesday, May 27, 2009
Telesphere Networks gets $15 million
Phoenix Business Journal - by Patrick O'Grady

Telesphere Networks Ltd. has received $15 million in a second round of funding designed to help continue growth in new markets through next year.

The money comes from previous investors, including Rally Capital, Hawkeye Investments LLC and Greenspun Corp., which put about $10 million into the company last June for expansion.

The company opened offices in Salt Lake City and Las Vegas in the past eight months. “We have a pretty good footprint in the West and I think you’ll see us continue to expand on that,” said Clark Peterson, the Scottsdale-based company’s CEO.

Growth could come through acquisitions or opening up in new cities, he said, but declined to comment on which markets the company is targeting. It now has customers in 44 states.

Revenue increased 60 percent last year, although Peterson declined to release the actual figures. The company also added 60 employees and now has more than 100.

Telesphere markets a centrally hosted, voice over Internet protocol PBX phone system to small and midsize businesses. The setup is touted as a capital-saving alternative to traditional units that are housed at the customers’ location.

In the past year, the economic crisis has pushed more business Telesphere’s way as companies look for ways to save funds, and some of that has come from large firms looking to control costs, Peterson said.

Telesphere is a good target for investors because of the market it serves, said Dennis Weibling, chairman of Rally Capital and Telesphere. Initial investors are back because of the growth they’ve seen in a short period of time, he said.

“With Telesphere, what’s been very interesting to us is the amount of adoption in this environment,” Weibling said.

A veteran of wireless carrier Nextel and others in the telecom industry, Weibling said he sees comparisons between what Telesphere offers and Nextel’s “push to talk” feature, which was a boon for its sales to small and midsize companies.